H Hu um ma an n R Re es so ou ur rc ce e M Ma an na ag ge em me en nt t, , Summer 2007, Vol. 46, No. 2, Pp. 265-284 © practices and policies between public-sector organizations and private companies in many countries across the world (Budhwar & Boyne, 2004, Rodwell & Teo, 2004. Therefore, the current study contributes to this body of literature by examining the involvement of HR departments in commercialized and noncommercialized public-sector entities and their perceived level of performance by senior line managers, a key stakeholder of the HRM function. More specifically, this article tests a model of the effect of the transfer of HR activities to line management on the strategic influence and performance of the HR department.The next sections of this article explore the public-sector HR function, the pressures to be strategic about HRM, and the forces toward the transfer of HR to line management. Moving toward strategic HRM usually implies the strategic integration of HR, with the end result that all of these factors drive perceptions of the HR function's performance. The remaining sections then review the methods and the results. Theoretical and practical implications of the results are discussed by considering the status and influence of HR departments and their relationship with line management in the process of strategic decision making.
Commercialization: A Context of Change for HRM DepartmentsFrom the mid-1980s, a reform movement to change public-sector management practices has grown in many Organisation for Economic Co-operation and Development (OECD) countries (Hood, 1995). This reform movement emphasizes issues of economy, efficiency, and effectiveness in public services and is often known as new public management (Lonti & Verma, 2003). The elements of NPM underpin much of the move toward commercialization of the public sector. Growing evidence of the impact of the push toward NPM includes many changes to organizational structures, systems, and processes, such as restructuring, performance auditing, and privatization of state-owned entities (Osborne & Gaebler, 1992). Examples of commercialized public-sector entities include organizations, such as utilities, that are owned by the government yet operate as strategically independent entities. In many cases, these commercialized public-sector entities operate as if they had been privatized even though they are government-owned.Historically, personnel systems in the public sector have been highly regulated due to a preoccupation with eliminating corruption and partisan abuses (Coggburn, 2001). Under NPM, the management of people, resources, and programs in order to achieve results and outcomes replaces the administration of activities, procedures, and regulations (Lonti & Verma, 2003). Subsequently, NPM has profound implications for HRM in the public sector, including demands to become more flexible and responsive to the needs of line managers (Hays & Kearney, 2001). These newly structured public-sector agencies often adopt new HR strategies (such as t...